Trading in your old car often knocks quite a bit off the purchase price of your new car and can be a convenient way to get rid of your old car at the same time, without having to go through the hassle of finding someone to buy it. Trading in a car, however, tends to give the most advantage to the dealership, as they will pay you the wholesale price or less for your used car and will sell the used car for retail price or more. Their profit margin is often higher on the traded-in car than on the new cars they sell.
A trade-in can still be to your advantage, as many states calculate the sales tax on the new car as the price of the new car minus the trade-in value, so you would be paying less tax. Not all states do this, so you should check – any dealership in your state will know what your state’s tax policy on trade-ins is.
Another option you may wish to look into if you don’t want to privately sell your car is to sell your car back to its own dealership. If your car is a Volkswagen, and you’re buying a Toyota, sell your car back to the Volkswagen dealership. You may be able to get more for it than you could from the Toyota dealership because a Volkswagen is worth more to a Volkswagen dealership than it is to a Toyota dealership.
To find out the value of your car, you can ask your insurance agency. They have access to the Kelly Blue Book, which you may also be able to get a hold of, which tells the values of each car based on its model and year. You can also look online to find cars of similar makes and compare prices and mileage. Make sure you know all of this information before you go to trade in or sell your used car.
A small but important detail when looking to trade-in or sell your used car is cleanliness. Before you take the car in, spend a bit of time removing all of your personal belongings, vacuuming the car, and airing it out. As a bonus, you may find some coins in the cushions. A professional detail job may also increase the perceived value of your car. A clean car can sell for a couple of hundred dollars more than a messy car, and dealers are people too. They too are affected by the appearance of a car, even if they will detail the car again before they put it out onto their lot.
Trade-ins can make your new car buying experience easier. You won’t have to worry about what to do with your old car, and it definitely feels better to have a lower price on your new car. But don’t forget that you paid money for your old car, too, and you deserve some of the value. Also, don’t let a trade-in damage your negotiating power – try to keep the negotiating about the trade-in separate from your negotiations about the purchase price of the new car